Investments

6 Months Ended

Jun. 30, 2025

Investments, Debt and Equity Securities [Abstract]

5 — Investments

The Company holds a diversified investment portfolio, consisting of fixed maturity securities and, to a much lesser extent, equity securities, with the fixed maturity securities classified as available-for-sale. As of June 30, 2025, all fixed maturity securities had an investment grade rating from at least one nationally recognized rating organization.

Available-for-sale investments

The following tables summarize the Company's available-for-sale investments as of June 30, 2025 and December 31, 2024:


	June 30, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

Fixed maturity securities:	in thousands
Corporate	$	228,280	$	3,338	$	(284)	$	231,334
U.S. Treasury	154,013		575		(234)		154,354
States and municipalities	29,849		775		—		30,624
Foreign	20,788		68		(4)		20,852
Asset-backed securities	27,571		380		(50)		27,901
Mortgage-backed securities	123,170		1,590		(707)		124,053
Total fixed maturity securities	$	583,671	$	6,726	$	(1,279)	$	589,118


	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

Fixed maturity securities:	in thousands
Corporate	$	230,917	$	1,226	$	(954)	$	231,189
U.S. Treasury	146,211		424		(760)		145,875
States and municipalities	31,543		134		(92)		31,585
Foreign	21,022		59		(24)		21,057
Asset-backed securities	23,625		175		(120)		23,680
Mortgage-backed securities	125,351		396		(1,445)		124,302
Total fixed maturity securities	$	578,669	$	2,414	$	(3,395)	$	577,688

On a quarterly basis, fixed maturity securities with unrealized losses are reviewed to determine whether the decline in fair value is attributable to a material credit loss. As of June 30, 2025, no credit loss allowance was recorded and all unrealized losses on available-for-sale fixed maturity securities were in such position for less than one year. It is management's intent to hold these investments to recovery, or maturity, if necessary, to recover the decline in valuation as prices accrete to par.

The following table summarizes the contractual maturities of the Company's available-for-sale investments as of June 30, 2025:



	Amortized Cost		Estimated Fair Value

	in thousands
Due in one year or less	$	106,666	$	106,871
Due after one year through five years	260,297		263,595
Due after five years through ten years	65,968		66,698

Mortgage-backed and asset-backed securities	150,740		151,954
Total fixed maturity securities	$	583,671	$	589,118

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Net investment income

The following table presents the components of net investment income, which is recorded within "Interest and other income (expense), net" in the Condensed Consolidated Statements of Operations, for the three and six months ended June 30, 2025 and 2024:


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024

Interest income:	in thousands
Cash and cash equivalents and restricted cash and cash equivalents	$	2,564	$	7,561	$	4,724	$	16,640
Fixed maturity securities	6,943		3,648		13,928		3,794
Total interest income	9,507		11,209		18,652		20,434
Dividends on equity securities	39		24		79		24
Gross investment income	9,546		11,233		18,731		20,458
Investment expenses	(130)		(122)		(257)		(122)
Net investment income	$	9,416	$	11,111	$	18,474	$	20,336

Net realized and unrealized gains (losses) on investments

The table below presents the components of pre-tax net investment gains (losses), which is recorded within "Interest and other income (expense), net" in the Condensed Consolidated Statements of Operations, and the pre-tax change in net unrealized gains (losses) included in the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2025 and 2024. The gross amounts of realized investment gains and losses on fixed maturity securities were not material to the Condensed Consolidated Financial Statements and are presented on a net basis in the table below.


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024

Fixed maturity securities:	in thousands
Net realized investment gains (losses)	$	16	$	(31)	$	231	$	(31)
Equity securities:
Total change in fair value of equity securities	1,178		478		648		478
Net investment gains	$	1,194	$	447	$	879	$	447
Change in net unrealized gains (losses) on available-for-sale investments included in Other comprehensive income (loss):
Fixed maturity securities	$	1,323	$	(951)	$	6,421	$	(951)

Hagerty, Inc. 10-Q